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MKT501 Marketing Management GDB Solution Fall 2012

Background
Any entity, product or company passes through four main stages of its life;
Introduction: This stage includes idea germination and development. When something is created or introduced for the first time. Product launching takes place in this stage.
Growth: At this stage, product starts to generate demand. Product acceptance is confirmed when customers begin to make repeat purchases and company starts to earn profits.
Maturity: In this stage, product reaches at the peak of its growth. It has the highest sales volume and sales revenue. Price starts to decrease because of low cost of production and entry of similar products into the market. At this stage, product stops growing and becomes stagnant. It is tried to prolong this stage to the maximum.
Decline: This stage starts when product starts to lose sales volume even after every effort has been made. Profit margins begin to decline as demand and production is low and company no more has economies of scale.
The Case
Coca-Cola, the most prominent and leading brand in beverage industry, had started its business in Pakistan in 1996 and established a company with the name of Coca-Cola Beverages Pakistan Limited. It is known for its unique taste but in the beginning, it didn’t get the appeal from masses. Pepsi Cola was the famous brand at that time. Coca-Cola made its mark by positioning its products to urban areas and set it as a status symbol. Sooner, growth was observed and it began to capture market share. In early 2000s, it became the most popular beverage products provider. Coca-Cola has well maintained its position and still leading the market.
Topic of Discussion
How Coca-Cola has managed to sustain its position at maturity stage from so long while being in intense competition? On the basis of your observation, discuss any five marketing activities that have been undertaken by Coca-Cola in this respect.

Solution:

The concept of the product life cycle is briefly introduced to understand how the components
of the marketing mix change during different phases of the life cycle of the product.
Different products will take different spans of time to pass thorugh the cycle of intoduction, growth, maturity and decline.
The marketer should seek and identify the stage in life cycle from the conditions in the market.
coca-Cola from so long while being in intense competition,has managed to sustain its position at
maturity stage which is actually the stage in which the product reach to its peak and becomes well established
the reason is Coca-cola
1. Has simplified its product line.
2. kept the price of the product moderate.
3. built and maintain its image and facilitated sales promotion.
4  seek close dealer relationship in order to distribute its product.
5. product diversification such as Coke, Fanta, Sprite helps it to maintain and increase its market share.
Product Diversification means that the  manufacturer offer more than one product.It involves
new products or lines to products in order to have a balanced or optimum product range.
These are the reasons due to which Coca Cola has managed to maintain its position at maturity stage many years from now.



Another Solution:

Marketers’ marketing mix strategies change as their products goes through their life cycles.
Advertising, for example, should be informative in the introduction stage, persuasive in the growth and
maturity stages, and be reminder-oriented in the decline stage.
Promotional budgets tend to be highest in the early stages, and gradually taper off as the product matures
and declines.
Pricing, distribution, and product characteristics also tend to change.
Customers respond to new products in different ways.
The first two stages, introduction and growth, are often seen as offensive in nature.
The second two stages, mature and decline stage, are often seen as defensive in nature.
The defensive stage is sometimes called the armadillo phase because of that animal’s defensive technique of
hiding in its shell.



Another Solution:

In addition to investments in bottling and distribution infrastructure, the Comany also makes significant expenditures in support of their trademarks. Marketing is defined as anything that creates consumer demand for their products.

Integrated marketing programs are used to create awareness and product appeal for their trademarks. These programs include activities such as advertising, point-of-sale merchandising and product sampling.
Through bottling investments and strategic alliances with other bottlers of their products, the Company develops and implements integrated marketing programs on a global basis.
In developing a global strategy for a Company trademark, the Company performs product and packaging research, establishes brand positioning, develops precise consumer communications and seek consumer feedback

To maximize the impact of advertising expenditures, specific brands are assigned to individual advertising agencies, enabling the enhancement of each brand’s global positioning, increaseing accountability and the efficient use of the Company’s marketing expenditures.

During 1996, the Company’s direct marketing expenses, which include consumer marketing activities, increased 12 percent to $4.3 billion.

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